diff --git a/packages/SystemUI/aconfig/systemui.aconfig b/packages/SystemUI/aconfig/systemui.aconfig
index 80398cd..df44076 100644
--- a/packages/SystemUI/aconfig/systemui.aconfig
+++ b/packages/SystemUI/aconfig/systemui.aconfig
@@ -857,6 +857,16 @@
 }
 
 flag {
+   name: "restart_dream_on_unocclude"
+   namespace: "systemui"
+   description: "re-enters dreaming upon unocclude when dreaming when originally occluding"
+   bug: "338051457"
+   metadata {
+     purpose: PURPOSE_BUGFIX
+   }
+}
+
+flag {
   name: "communal_bouncer_do_not_modify_plugin_open"
   namespace: "systemui"
   description: "do not modify notification shade when handling bouncer expansion."
diff --git a/packages/SystemUI/multivalentTests/src/com/android/systemui/communal/CommunalDreamStartableTest.kt b/packages/SystemUI/multivalentTests/src/com/android/systemui/communal/CommunalDreamStartableTest.kt
index def63ec..bfed33c 100644
--- a/packages/SystemUI/multivalentTests/src/com/android/systemui/communal/CommunalDreamStartableTest.kt
+++ b/packages/SystemUI/multivalentTests/src/com/android/systemui/communal/CommunalDreamStartableTest.kt
@@ -16,12 +16,16 @@
 
 package com.android.systemui.communal
 
+import android.platform.test.annotations.EnableFlags
 import android.service.dream.dreamManager
 import androidx.test.ext.junit.runners.AndroidJUnit4
 import androidx.test.filters.SmallTest
+import com.android.systemui.Flags
 import com.android.systemui.SysuiTestCase
+import com.android.systemui.communal.domain.interactor.communalInteractor
 import com.android.systemui.keyguard.data.repository.fakeKeyguardRepository
 import com.android.systemui.keyguard.data.repository.fakeKeyguardTransitionRepository
+import com.android.systemui.keyguard.data.repository.keyguardRepository
 import com.android.systemui.keyguard.domain.interactor.keyguardInteractor
 import com.android.systemui.keyguard.domain.interactor.keyguardTransitionInteractor
 import com.android.systemui.keyguard.shared.model.KeyguardState
@@ -62,6 +66,7 @@
                     powerInteractor = kosmos.powerInteractor,
                     keyguardInteractor = kosmos.keyguardInteractor,
                     keyguardTransitionInteractor = kosmos.keyguardTransitionInteractor,
+                    communalInteractor = kosmos.communalInteractor,
                     dreamManager = dreamManager,
                     bgScope = kosmos.applicationCoroutineScope,
                 )
@@ -84,6 +89,32 @@
         }
 
     @Test
+    @EnableFlags(Flags.FLAG_RESTART_DREAM_ON_UNOCCLUDE)
+    fun restartDreamingWhenTransitioningFromDreamingToOccludedToDreaming() =
+        testScope.runTest {
+            keyguardRepository.setDreaming(false)
+            powerRepository.setScreenPowerState(ScreenPowerState.SCREEN_ON)
+            whenever(dreamManager.canStartDreaming(/* isScreenOn = */ true)).thenReturn(true)
+            runCurrent()
+
+            verify(dreamManager, never()).startDream()
+
+            kosmos.fakeKeyguardRepository.setKeyguardOccluded(true)
+            kosmos.fakeKeyguardRepository.setDreaming(true)
+            runCurrent()
+
+            transition(from = KeyguardState.DREAMING, to = KeyguardState.OCCLUDED)
+            kosmos.fakeKeyguardRepository.setKeyguardOccluded(false)
+            kosmos.fakeKeyguardRepository.setDreaming(false)
+            runCurrent()
+
+            transition(from = KeyguardState.OCCLUDED, to = KeyguardState.DREAMING)
+            runCurrent()
+
+            verify(dreamManager).startDream()
+        }
+
+    @Test
     fun shouldNotStartDreamWhenIneligibleToDream() =
         testScope.runTest {
             keyguardRepository.setDreaming(false)
diff --git a/packages/SystemUI/src/com/android/systemui/communal/CommunalDreamStartable.kt b/packages/SystemUI/src/com/android/systemui/communal/CommunalDreamStartable.kt
index 9e7fb4e..153b7aa 100644
--- a/packages/SystemUI/src/com/android/systemui/communal/CommunalDreamStartable.kt
+++ b/packages/SystemUI/src/com/android/systemui/communal/CommunalDreamStartable.kt
@@ -20,6 +20,8 @@
 import android.app.DreamManager
 import com.android.systemui.CoreStartable
 import com.android.systemui.Flags.communalHub
+import com.android.systemui.Flags.restartDreamOnUnocclude
+import com.android.systemui.communal.domain.interactor.CommunalInteractor
 import com.android.systemui.dagger.SysUISingleton
 import com.android.systemui.dagger.qualifiers.Background
 import com.android.systemui.keyguard.domain.interactor.KeyguardInteractor
@@ -27,8 +29,10 @@
 import com.android.systemui.keyguard.shared.model.KeyguardState
 import com.android.systemui.power.domain.interactor.PowerInteractor
 import com.android.systemui.util.kotlin.Utils.Companion.sample
+import com.android.systemui.util.kotlin.sample
 import javax.inject.Inject
 import kotlinx.coroutines.CoroutineScope
+import kotlinx.coroutines.flow.filter
 import kotlinx.coroutines.flow.launchIn
 import kotlinx.coroutines.flow.onEach
 
@@ -43,6 +47,7 @@
     private val powerInteractor: PowerInteractor,
     private val keyguardInteractor: KeyguardInteractor,
     private val keyguardTransitionInteractor: KeyguardTransitionInteractor,
+    private val communalInteractor: CommunalInteractor,
     private val dreamManager: DreamManager,
     @Background private val bgScope: CoroutineScope,
 ) : CoreStartable {
@@ -52,6 +57,19 @@
             return
         }
 
+        // Return to dream from occluded when not already dreaming.
+        if (restartDreamOnUnocclude()) {
+            keyguardTransitionInteractor.startedKeyguardTransitionStep
+                .sample(keyguardInteractor.isDreaming, ::Pair)
+                .filter {
+                    it.first.from == KeyguardState.OCCLUDED &&
+                        it.first.to == KeyguardState.DREAMING &&
+                        !it.second
+                }
+                .onEach { dreamManager.startDream() }
+                .launchIn(bgScope)
+        }
+
         // Restart the dream underneath the hub in order to support the ability to swipe
         // away the hub to enter the dream.
         keyguardTransitionInteractor.finishedKeyguardState
diff --git a/packages/SystemUI/src/com/android/systemui/communal/domain/interactor/CommunalInteractor.kt b/packages/SystemUI/src/com/android/systemui/communal/domain/interactor/CommunalInteractor.kt
index 6b4cf79..06c8396 100644
--- a/packages/SystemUI/src/com/android/systemui/communal/domain/interactor/CommunalInteractor.kt
+++ b/packages/SystemUI/src/com/android/systemui/communal/domain/interactor/CommunalInteractor.kt
@@ -163,6 +163,13 @@
                 initialValue = false,
             )
 
+    /** Whether to start dreaming when returning from occluded */
+    val dreamFromOccluded: Flow<Boolean> =
+        keyguardTransitionInteractor
+            .transitionStepsToState(KeyguardState.OCCLUDED)
+            .map { it.from == KeyguardState.DREAMING }
+            .stateIn(scope = applicationScope, SharingStarted.Eagerly, false)
+
     /**
      * Target scene as requested by the underlying [SceneTransitionLayout] or through [changeScene].
      *
diff --git a/packages/SystemUI/src/com/android/systemui/keyguard/domain/interactor/FromOccludedTransitionInteractor.kt b/packages/SystemUI/src/com/android/systemui/keyguard/domain/interactor/FromOccludedTransitionInteractor.kt
index e51ba83..2a7178f 100644
--- a/packages/SystemUI/src/com/android/systemui/keyguard/domain/interactor/FromOccludedTransitionInteractor.kt
+++ b/packages/SystemUI/src/com/android/systemui/keyguard/domain/interactor/FromOccludedTransitionInteractor.kt
@@ -18,6 +18,7 @@
 
 import android.animation.ValueAnimator
 import com.android.app.animation.Interpolators
+import com.android.systemui.Flags.restartDreamOnUnocclude
 import com.android.systemui.communal.domain.interactor.CommunalInteractor
 import com.android.systemui.dagger.SysUISingleton
 import com.android.systemui.dagger.qualifiers.Background
@@ -90,12 +91,15 @@
                     .sample(
                         communalInteractor.isIdleOnCommunal,
                         communalInteractor.showCommunalFromOccluded,
+                        communalInteractor.dreamFromOccluded
                     )
-                    .collect { (_, isIdleOnCommunal, showCommunalFromOccluded) ->
+                    .collect { (_, isIdleOnCommunal, showCommunalFromOccluded, dreamFromOccluded) ->
                         // Occlusion signals come from the framework, and should interrupt any
                         // existing transition
                         val to =
-                            if (isIdleOnCommunal || showCommunalFromOccluded) {
+                            if (restartDreamOnUnocclude() && dreamFromOccluded) {
+                                KeyguardState.DREAMING
+                            } else if (isIdleOnCommunal || showCommunalFromOccluded) {
                                 KeyguardState.GLANCEABLE_HUB
                             } else {
                                 KeyguardState.LOCKSCREEN
@@ -110,15 +114,19 @@
                         keyguardInteractor.isKeyguardShowing,
                         communalInteractor.isIdleOnCommunal,
                         communalInteractor.showCommunalFromOccluded,
+                        communalInteractor.dreamFromOccluded,
                     )
-                    .filterRelevantKeyguardStateAnd { (isOccluded, isShowing, _, _) ->
+                    .filterRelevantKeyguardStateAnd { (isOccluded, isShowing, _, _, _) ->
                         !isOccluded && isShowing
                     }
-                    .collect { (_, _, isIdleOnCommunal, showCommunalFromOccluded) ->
+                    .collect { (_, _, isIdleOnCommunal, showCommunalFromOccluded, dreamFromOccluded)
+                        ->
                         // Occlusion signals come from the framework, and should interrupt any
                         // existing transition
                         val to =
-                            if (isIdleOnCommunal || showCommunalFromOccluded) {
+                            if (restartDreamOnUnocclude() && dreamFromOccluded) {
+                                KeyguardState.DREAMING
+                            } else if (isIdleOnCommunal || showCommunalFromOccluded) {
                                 KeyguardState.GLANCEABLE_HUB
                             } else {
                                 KeyguardState.LOCKSCREEN
diff --git a/packages/SystemUI/tests/src/com/android/systemui/keyguard/domain/interactor/KeyguardTransitionScenariosTest.kt b/packages/SystemUI/tests/src/com/android/systemui/keyguard/domain/interactor/KeyguardTransitionScenariosTest.kt
index 687e91a..c3a806b 100644
--- a/packages/SystemUI/tests/src/com/android/systemui/keyguard/domain/interactor/KeyguardTransitionScenariosTest.kt
+++ b/packages/SystemUI/tests/src/com/android/systemui/keyguard/domain/interactor/KeyguardTransitionScenariosTest.kt
@@ -17,6 +17,7 @@
 package com.android.systemui.keyguard.domain.interactor
 
 import android.app.StatusBarManager
+import android.platform.test.annotations.EnableFlags
 import android.platform.test.flag.junit.FlagsParameterization
 import androidx.test.filters.SmallTest
 import com.android.compose.animation.scene.ObservableTransitionState
@@ -1424,6 +1425,39 @@
         }
 
     @Test
+    @BrokenWithSceneContainer(339465026)
+    @EnableFlags(Flags.FLAG_RESTART_DREAM_ON_UNOCCLUDE)
+    fun dreamingToOccludedToDreaming() =
+        testScope.runTest {
+            // GIVEN a device on lockscreen
+            keyguardRepository.setKeyguardShowing(true)
+            runCurrent()
+
+            // Given a device that is dreaming
+            keyguardRepository.setDreaming(true)
+
+            // GIVEN a prior transition has run to OCCLUDED
+            runTransitionAndSetWakefulness(KeyguardState.DREAMING, KeyguardState.OCCLUDED)
+            keyguardRepository.setKeyguardOccluded(true)
+            runCurrent()
+
+            // WHEN occlusion ends
+            keyguardRepository.setKeyguardOccluded(false)
+            runCurrent()
+
+            // THEN a transition to GLANCEABLE_HUB should occur
+            assertThat(transitionRepository)
+                .startedTransition(
+                    ownerName = FromOccludedTransitionInteractor::class.simpleName,
+                    from = KeyguardState.OCCLUDED,
+                    to = KeyguardState.DREAMING,
+                    animatorAssertion = { it.isNotNull() },
+                )
+
+            coroutineContext.cancelChildren()
+        }
+
+    @Test
     fun dreamingToPrimaryBouncer() =
         testScope.runTest {
             // GIVEN a prior transition has run to DREAMING